Problem 3 (10 marks) You are the manager of the Santa Cruz Boardwalk Amusement Park, in Santa Cruz, CA, which offers a number of thrill rides to tourists. You consider yourself a monopolist. All of your consumers have identical preferences, and a typical consumer's inverse demand function for rides in your amusement park is P = 42 10*Q, where Q is the number of rides and P is the price per ride. Your cost function is C(Q) = 2*Q (i.e. MC = $2). a) What is the optimal \"linear\" (i.e. standard) price that you could charge? What would your prot be in that case? b) Now suppose you could charge a two-part tariff that includes a xed fee for entering the amusement park and a price per ride. What would be the optimal xed fee and price per ride? How much more or less prots would you make in this compared to the case of linear pricing examined in part a)? 0) Draw two gures with the demand curve and the MC curve. In the rst one, represent your answers to part a), including the MR curve, and equilibrium output, price and prot per consumer. In the second gure, represent your answers to part b) including equilibrium output, price and prot per consumer. Comment briey